Stocks End Mixed on Rise in Oil, Gas Prices

Stocks could muster only a mixed close Thursday as action in commodity markets stole the spotlight.

The Commerce Department reported that sales at the nation’s retailers rose 0.4% in November, the best reading in three months and in line with analysts’ expectations.

But the news failed to trigger a burst of buying on Wall Street, perhaps because it wasn’t surprising. Many retailers had already announced that late November sales were strong.

The Dow industrials eased 50.74 points, or 0.6%, to 8,538.40, halting a two-day rally. Still, rising stocks outnumbered losers by 17 to 15 on the New York Stock Exchange.

In the Nasdaq market, the composite index inched up 2.96 points, or 0.2%, to 1,399.55, and winners and losers were about even.

Stocks may have been held back in part by a jump in energy prices. Crude oil rose to a seven- week high after the Organization of the Petroleum Exporting Countries agreed to reduce production to keep prices from falling next year.

OPEC wants oil prices to stay between $22 and $28 a barrel as demand falls to an annual low in the second quarter. Members say they can accomplish that goal only if output is reduced to 23 million barrels a day from an estimated 24.38 million now.

Output reductions from OPEC, which controls about a third of the world’s oil, will take effect Jan. 1.

In New York, near-term crude oil futures rose 61 cents to $28.01 a barrel.

Natural gas prices also continued to surge, hitting a new 19-month high, on concerns that cold weather in much of the country has drawn down supplies faster than expected.

Near-term gas futures in New York jumped 38 cents, or 8.1%, to $5.09 per million British thermal units.

In other trading, near-term gold futures surged $6.60 to $331.40 an ounce in New York, a five-year high, bolstered by terrorism concerns and a weaker dollar.

Given the strength in energy prices and in gold, some analysts said it was surprising that stocks didn’t fare worse. Many investors continue to bet that the economy will improve in 2003, lifting Wall Street.

But “having already worked in two months of solid performance, the market looks a little tired here,” said Bryan Piskorowski, market commentator for Prudential Securities.

Among Thursday’s highlights:

* Bristol Myers weighed on drug shares, after a Wall Street Journal story questioned the company’s accounting in recent years. The stock slid $1.80 to $25.35.

Among other drug shares, Johnson & Johnson lost $1.12 to $55.05, Lilly slid $1.75 to $64.10 and Merck dropped $1.23 to $57.16.

* The biotech sector got a lift after Amgen said it expects to exceed analysts’ 2003 earnings expectations because of strong product sales. Amgen soared $3.18 to $50.45, Genentech gained $1.07 to $34.55 and Biogen was up 75 cents to $42.53.

* American International Group, the world’s largest insurer, lost $1.53 to $60.09 amid concern a possible settlement of asbestos claims against Halliburton would force insurers to increase their reserves.

Halliburton said it’s close to a $4-billion agreement to settle current and future asbestos claims.

Also in the insurance sector, Chubb fell $1.16 to $56.33 and XL Capital lost $1.48 to $81.75.

* Energy stocks rallied as crude oil and natural gas prices gained. EOG Resources rose $1.21 to $41.49, Burlington Resources jumped $1.06 to $43, Apache surged $2.06 to $58.84 and Occidental Petroleum was up 51 cents to $28.60.

Nabors Industries, the world’s biggest onshore oil and natural-gas driller, jumped $1.97 to $37.77. Transocean, the world’s largest offshore oil and natural-gas driller, advanced $1.04 to $24.80.

* In the tech sector, Ciena rose $1.02 to $6.20 after the networker announced it expects revenue in the current quarter to increase by as much as 10% from the last quarter.

Among other tech shares, Intel inched up 3 cents to $18.19 and Cisco Systems was up 26 cents to $14.11.

But IBM fell $1.27 to $80.17, Microsoft lost 49 cents to $54.17 and Seagate Technology lost 32 cents to $11.18.

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Market Roundup, C21-22